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ACCA Strategic Professional · Strategic Business Leader · Qualities of leadership

Kestrel Logistics is facing a collapse in its core market. Its leader, Dev, holds workshops where he sets out a bold new vision of becoming a digital freight platform. He challenges long-held assumptions, coaches individual managers and encourages them to experiment. Several managers say they now work for the vision rather than for their bonus. Which of the following best describes the leadership approach, and what it implies?

This is transformational leadership. Dev communicates an inspiring vision, challenges assumptions, coaches individuals and moves managers to commit to the vision beyond their bonuses. That implies followers' motivation and values are being shifted, which suits an organisation needing radical strategic change rather than routine performance maintenance.

  1. ATransactional leadership, implying performance will be maintained by tightening reward-and-penalty contracts
  2. BTransformational leadership, implying followers' values and motivation are being changed to support major strategic changeCorrect
  3. CAutocratic leadership, implying that decisions are imposed without any follower involvement
  4. DManagement by exception, implying the leader intervenes only when standards are not met

Explanation

Dev articulates a vision, challenges assumptions (intellectual stimulation), coaches individuals (individualised consideration) and raises motivation beyond rewards. These are hallmarks of transformational leadership, suited to major change. Transactional and exception-based styles rely on rewards and corrections rather than vision.

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